Difference between paying by direct debit and on receipt of bill

Sarahboo1912

Hi All, my fixed rate energy tariff with Shell ends today. 

After seeing the stories about direct debits being higher than expected, I decided that I’m happy to move to the standard variable tariff but would rather pay on receipt of bill than by direct debit. I want to check the bill before payment and have the opportunity to dispute if necessary. I looked online and saw that I would lose my £4 discount per month per fuel (which I feel is acceptable- there are costs to billing) and that I had to call up to move to this payment method.

On hold, the music was interrupted by a man explaining how there is “only one standard variable tariff at the moment- protected by Ofgems price cap.” All good and totally expected.

So you can imagine my surprise when I finally get through and am told that to move to the payment method I want, not only will I lose the DD discount, but the actual energy rates I will pay are higher too. I asked for the rates to be sent to me and there is quite a difference. 

To pay by bill (compared to DD), I will pay an additional 17.41p/day + 1.56p/kWh more for my electric and 4.81p/day + 0.4p/kWh more for gas.

What happened to only having one standard variable tariff?! Clearly not true. It’s exactly the same fuel I would be receiving but feel I am being punished for not wanting to give them free reign into my bank account. 

Like I said I totally understand why there is a set monthly discount and I am willing to give that up- but why should I have to pay higher rates too? 

Anyone know any suppliers that don’t charge lots more to pay on receipt of bill?

Thanks 

MWT

Sarahboo1912 said:

So you can imagine my surprise when I finally get through and am told that to move to the payment method I want, not only will I lose the DD discount, but the actual energy rates I will pay are higher too. I asked for the rates to be sent to me and there is quite a difference. 

No reason to be surprised, the Ofgem cap has variations for payment method and the standard credit method you want to use incurs additional costs and so the cap is higher.

There is still only one standard variable tariff, but it is set at different rates by regain, metering type and payment method...

There are a few suppliers that do not charge more for a standard credit account even though they are allowed to do so, Octopus is one for example.

k_man

The two are not mutually exclusive.
Direct debit is how you pay.
Receipt of bill is when.

Although I don't know if She'll offer it, but it sounds like you want DD on receipt of bill, rather than fixed monthly DD.

agentcain

I think ofgem allows for this variation in charges, with DD being cheaper than on receipt (quarterly?)
However, there's nothing stopping you from requesting a variable DD as opposed to a fixed DD. You still get the DD discounts and better rates, but the supplier will not charge you more; you will pay exactly what you consumed on a monthly basis, less in summer, more in winter.

brook_heather

I am with Shell (gas only) and pay variable direct debit on receipt of bill so my monthly payment is calculated each month and that's what I pay via my direct debit - I am billed at the standard direct debit tariff.

Robin9

@brook_heather  What is the timescale between receiving the bill and Shell calling off the DD ?  I think the OP is hoping that there is time to cancel the DD if he/she doesn't like the size of the bill

Sarahboo1912

Thanks for your replies all. In anger I probably didn’t word the question quite right. 

I’m genuinely wondering why there would be a difference. What causes the electricity standing charge to be 17.4p per day higher purely to pay by standard credit/bill rather than direct debit?

I worked out the difference in costs in total will come to £240 per year, caused purely by the different payment method and am genuinely curious as to what justifies it. I work in accounts and it doesn’t cost that much to bill a client.

Or is it just because they can?

brook_heather

This month my bill date was on the 13th and payment taken on the 30th.

Sarahboo1912

I should add that it’s not DD on receipt of bill I am looking for. I want to physically make payment each month so that I am in control of it. I have always done the same with my water bill and don’t think I pay any extra for that.

brook_heather

Sarahboo1912 said:

I should add that it’s not DD on receipt of bill I am looking for. I want to physically make payment each month so that I am in control of it. I have always done the same with my water bill and don’t think I pay any extra for that.

Then you will be paying the higher non-DD tariff as you listed above.

agentcain

Sarahboo1912 said:

Thanks for your replies all. In anger I probably didn’t word the question quite right. 

I’m genuinely wondering why there would be a difference. What causes the electricity standing charge to be 17.4p per day higher purely to pay by standard credit/bill rather than direct debit?

I worked out the difference in costs in total will come to £240 per year, caused purely by the different payment method and am genuinely curious as to what justifies it. I work in accounts and it doesn’t cost that much to bill a client.

Or is it just because they can?

That basically.